US companies sidestep Huawei export ban

26 JUN 2019

US technology companies including Qualcomm and Intel reportedly found ways to sidestep the government’s export ban on Huawei and continue some business with the under fire Chinese vendor.

The Wall Street Journal (WSJ) named three US technology companies; Micron Technology, Qualcomm and Intel as having resumed shipments of some products to Huawei without violating US regulations. Others including ON Semiconductor are looking at ways to also continue activities.

Micron restarted some shipments on Tuesday, while Qualcomm is now shipping certain RF components, although its broadband chips remain off limits. Intel has also resumed shipments of some of its products, sources said.

WSJ reported Huawei spent $11 billion on US technology in 2018, but the company was placed on a trade blacklist by the Department of Commerce in May. The move banned US companies from selling equipment and services to Huawei.

US-based Broadcom said earlier this month it would take a $2 billion hit as a result of the Huawei ban, as well as other factors.

Broadcom’s admission suggested other companies would follow and also cut their outlook as a result of a lack of business from Huawei.

However, while the US ban led to an industry-wide halt in shipments to Huawei, some companies are now looking at ways to fulfil their contracts with the vendor.

The trade blacklist means exports from the US to Huawei are banned, but WSJ noted the rules do not prohibit shipments of components and equipments made in other countries. This is as long as they are not made with 25 per cent of US-originated material.

Another route for companies to continue dealing with Huawei is to classify products as non-domestic, which could also make them exempt from US rules.